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Local advertising continues to get smarter as data sets are unlocked to provide more context around places and their interconnectedness. This goes into hyperdrive as smartphone penetration turns the corner on 50 percent of mobile users — more signals and more data result.

We’ve been spending lots of time talking to the companies that are capturing that data and applying it towards more effective content and ad delivery. It’s a key area of development in mobile local media, and builds on the data that companies like Localeze have been developing for years (and continue to).

This emerging batch of location analytics companies include Sense Networks, PlaceIQ, Locu, Locately (which just got acquired) and lots of others — not to mention the mobile local ad networks that are building similar capability in house (xAd, WHEREads, JiWire etc.).

This will be a continued focus for lots of our coverage. Meanwhile, check out my monthly Search Engine Watch column resulting from a pre-brief with JiWire CEO David Staas about the company’s Location Graph, announced this week.¬†Preview below and much more to come.

As mobile and local continue to collide, we’re seeing lots of evidence that localized content boosts user engagement. That also translates to higher performance and monetization for mobile ads. But one thing often ignored is what exactly we mean when we say “localized content”?

Some define it as geotargeting via IP address. That can tell you what part of the country someone is in — hardly a level of precision that anyone should get excited about. Meanwhile, in mobile search (just as it is online) geographic modifiers in search queries can be used to determine user intent and thus more relevant results.

There’s also display ad placement where users’ local intent is inferred from their presence within a location-centric app like Yelp. That can involve local ad copy and calls to action (i.e. click-to-call, maps, etc.). It can also involve geofenced ad placement which matches a device’s position to an advertiser’s defined service radius.

The latter utilizes GPS but is at the mercy of whatever app publishers are collecting and passing along to ad networks or ad servers. This often requires an opt-in (“This app would like to use your location”), and doesn’t contain deeper data to pinpoint location-related variables like user profiles, intent and predicted behavior.

That’s where things are starting to get interesting. A new batch of companies are bringing more data into the picture by layering in things like historical behavior, demographics, or users’ movements from place to place. The goal is to bring more context to a given device, or to a spot on the map. Call it big data meets local.

I’ve spent some time talking with this new batch of data providers including PlaceIQ and Sense Networks. These join mobile local ad networks that are building similar systems in-house, including xAd and JiWire. The latter is the latest to make waves in this sub-sector with this week’s launch of its “Location Graph”.

In short, this is a tool to draw correlations between location and behavior. It does this by profiling users based on the patterns of where they are and where they’ve been. Those profiles are used for predictive modeling around future behavior, and thus what contextual and demographic ad targeting will most resonate.

“There are audience solutions out there, and location solutions from a geotargeting perspective,” JiWire CEO David Staas told me in a pre-brief last week. “Both fail to take into account historical usage patterns. Just like social graphs look at interconnectedness of people [our] patterns show linkages between places.”

Read the rest.

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